As it negotiates Chapter 11 waters, Windstream Holding's revenues were down across the board during its third quarter earnings report on Thursday.
Little Rock, Ark.-based Windstream's adjusted total revenue and sales were $1.27 billion in the quarter, which was down from $1.38 billion in the same quarter a year ago. After earning $1.4 billion in the second quarter of 2018, Windstream posted $1.29 billion in total revenue and sales during its second quarter earnings report.
Windstream's Kinetic broadband service revenues were $506 million compared to $525 million in the same period a year ago. Enterprise service revenues were $650 million compared to $737 million and wholesale service revenues were $86 million compared to $96 million in the same time frame.
On the plus side, Windstream grew its Kinetic broadband customer base for the sixth consecutive quarter, adding 5,700 new subscribers compared to 1,900 net adds in the previous quarter. Windstream expects to add approximately 25,000 broadband subscribers this year.
"Year-to-date through September, we have added approximately 19,000 broadband subscribers, a 126% increase year-over-year," said Windstream CEO and President Tony Thomas, according to a Seeking Alpha transcript. "In the Enterprise business unit, we continued to see strong growth in our strategic products. We remain the largest SD-WAN service provider in the country in terms of customers and locations served and our strategic revenues grew by 41% in the quarter.
Windstream Holdings is continuing its battle against former spinoff Uniti Group, as well as other stakeholders, which Thomas said includes "both litigation against and negotiations with Uniti." If the negotiations with Uniti fail, Thomas said Windstream is ready to move forward with a trial in March.
In February, Windstream lost a legal battle with New York hedge fund Aurelius Capital Management over whether Windstream had defaulted on bonds by spinning off the Uniti Group four years ago. As part of that spinoff, Windstream transferred copper-based network assets to Uniti, which Windstream leased back from Uniti to serve its 1.4 million residential and business customers across its 18-state footprint.
After the February ruling, Windstream filed for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York that same month.
Windstream is paying $54 million per month to Uniti for access to Uniti's network assets. The master lease with Uniti is set to expire in 2030, and has an annual rent of approximately $659 million. Windstream filed a complaint against Uniti on July 25 that sought to re-characterize its relationship with Uniti from a lease to a financing arrangement.
Windstream didn't conduct a Q&A with analysts during Thursday's third quarter earnings call.